Brad Heath was tired of never getting invited by his large customers to the big dance. So two years ago, the CEO of VirTex Assembly Services Inc., a small electronics manufacturing services provider, decided to put his company through a makeover that went way beyond skin deep.
Throughout its 10-year history, VirTex often succeeded in getting contracts from large OEMs to build products such as notebook computers and networking equipment, but once those products went into widespread distribution and large-scale production, the OEMs all too often would instinctively turn to VirTex’s large offshore competitors, which could offer lower unit prices, thanks to lower labor costs.
Then, two years ago, after landing a deal to produce ruggedized laptops to be private-labeled by a Fortune 50 company, Heath decided to do everything he could to hold onto the contract, even as it moved into high volume.
Heath knew that VirTex would need to significantly reduce its costs and, at the same time, deliver to its customer the type of flexibility and short turnaround times that competitors thousands of miles away would not be able to match, much less beat.